UK ad spend reached £10.6 billion in Q3 2024, according to the latest Expenditure Report from the Advertising Association (AA) and WARC, marking the first time ad spend has exceeded £10 billion in a third-quarter period.
The total spend represents a 9.7 percent increase on Q3 2023, continuing the solid rise in UK ad spend after dipping during the pandemic in 2020. The growth was driven by double-digit YoY increases for online display, search and direct mail, according to the figures, offsetting double-digit declines in cinema, magazine brands and online classifieds.
The 26 percent YoY drop in cinema spending suffers unfavourable comparisons to the 2023 quarter that saw the release of both Barbie and Oppenheimer.
Meanwhile TV spend fell by 2.6 percent YoY, despite the Olympics, Paralympics and Men’s Euros finals during the quarter. AA and WARC suggested the sports events contributed to an 8.7 percent increase in BVOD spending. However the BVOD figure is included in the overall total, so while spending on streaming services is on the rise, it was still not enough to offset the overall decline in ad spend on TV.
Returning to growth
But looking at the forecast for 2024 as a whole, TV spend is expected to see slight growth of 0.4 percent YoY, driven by a 12.4 percent increase on BVOD. The total includes a particularly strong Q2 for TV spending, with the first half of the Euros contributing to 9 percent YoY growth, the channel’s strongest quarter in over two years. The projected annual figures would mark a return to growth for TV, which saw an 8.9 percent YoY fall in 2023.
And total 2024 spending across all channels is predicted to climb 11.2 percent YoY, exceeding £40 billion for the first time. That growth is expected to continue in 2025, rising 6.9 percent to reach £43.5 billion this year. The forecast suggests cinema and online classifieds will return to growth this year, while TV will remain flat as declining linear spend continues to drag the strong growth of BVOD.
“Online ad formats, benefitting from the widespread adoption of new AI tools, have propelled the UK ad market to exceptionally strong growth so far in 2024 and will continue to drive expansion into 2025,” said James McDonald, Director of Data, Intelligence & Forecasting at WARC. “However, economic uncertainty remains at both a local and global level. As a new US president comes into office, attention will be focussed on implications for the world economy. In the UK, advertising businesses will look to the UK Government’s growth strategy and how it will affect the industry. A deterioration in overall business confidence could lead some marketers to depress spend in the short term.”
“While there is much work to do to kickstart growth in the UK economy, we know investment in advertising produces a fantastic return,” added AA CEO Stephen Woodford. “It supports competition, innovation and jobs up and down the country.”